Webinar walks owners and contractors through risks associated with project sites

Journal of Commerce | Angela Gismondi | November 29, 2022

Owners and contractors were given tips on navigating risks associated with a project site, such as early occupancy, neighbouring projects and health and safety during a recent webinar. 

Managing Risks Associated with a Project Site was hosted by Weirfoulds LLP. It addressed issues related to project sites that can arise that owners, contractors and subcontractors should be aware of.

Early occupancy, or allowing an owner to take over part of a site before the project is complete, can be a bit tricky, said Krista Chaytor, partner at WeirFoulds.

“The most important thing really is to think about what are the preconditions if you’re the contractor. What do you need the owner to agree to and if you’re the owner saying, ‘is it worth it or can I actually comply with these obligations?” Chaytor explained.

Other important things to consider include “are you going to limit times when the owner can be there as the contractor? Is the owner going to have to agree to be bound by some safety conditions that the contractor puts in place?”

Disrupting the remaining work should also be a consideration.

“We see things like suddenly people who are coming to the site…are parking in strange places that the contractor needs for lay down areas,” said Chaytor.

As a general contractor, Jayne McLean, director of project delivery with BDA Inc., said early occupancy can be a challenge but it’s also becoming a more common occurrence post-COVID because projects have been delayed and people want to move into their spaces.

“My biggest concern is the safety risk,” McLean said. “As a general contractor you would still remain the constructor. Therefore everyone who is on the site will have to work to the general contractors’ site rules and go through the safety orientation and all the safety pieces. Sometimes when the owner is moving in, they may not be construction people so they may not necessarily be up to speed on safety requirements, used to wearing PPE. That education piece that you need to add is, ‘no, it’s still my site. Yes, it’s your building but it’s my site. It’s my rules and you have to play by my rules to come in.’”

Neighbouring or overlapping projects on a site may also pose a problem.

Jeff Scorgie, partner at Weirfoulds, explained there are two distinct scenarios: where there is a single owner and they are undertaking two projects that are next door or close with different contractors; and where separate owners are undertaking projects that are close by or even sometimes overlapping.

When it’s one owner with two distinct projects, the owner and the contractor should try and achieve a separation of time or space, he said.

“That’s really important for the occupational health and safety perspective, because if the owner can achieve a separation in time, having the projects run at different times…then they are lowering their risk of potentially being found to be the constructor under the Occupational Health and Safety Act,” said Scorgie. “When it comes to separation of space, you are looking at things like separate access, separate egress, separate entrances, separate check-in points and ideally some sort of physical barrier or signage.”

Having two projects overlapping with different owners and contractors is even more challenging because it’s something the Occupational Health and Safety Act doesn’t contemplate, said Scorgie.

“It can be a real challenge from a liability perspective as well as a logistics planning perspective,” he said. “What we have sometimes done in those situations is help draft essentially a four-way health and safety co-ordination and prevention, or maybe build that into the lease or whatever underlying contractual arrangements are in place, where you essentially have the two owners and the two contractors all on the same page acknowledging who is in control of what area.”

Scorgie also talked about managing risk of site conditions and the issue of giving bidders access during the procurement period.

“There will often be language that we see in the market, owners often adding that says the contractor essentially warrants…and acknowledges that it was given full access to the site and performed a thorough or very careful or very detailed investigation of the site conditions,” Scorgie said. “You sometimes see these clauses go on to say that the contractor is deemed to have essentially fully and thoroughly reviewed all the site conditions and accepts the site as is.”

However, sometimes the contractors are not given the opportunity to visit the site and conduct a thorough enough investigation which may expose them to risk.

“If the contractor sees that clause in the contract, they may very well increase their price to reflect some sort of potential contingency because they actually weren’t given such a thorough opportunity to investigate the site,” Scorgie said. “Sometimes the more preferable approach would be to make sure the tender documents and the construction contract accurately reflect the nature of the investigation the contractor was given.”

Follow the author on Twitter @DCN_Angela